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Here is a Country Profile revision sheet that I have created as part of my revision programme for my A2 students.
The idea is to complete (neatly) one sheet each for six countries – leaving room on the other side for additional useful revision concepts and background context. ideally students will choose at least one African country, a middle income nation, one or more of the BRICS or MINT countries and an EU country other than the UK.
The sheets can be duplicated for class use and make an excellent prompt for discussion. Download a free version by clicking this link. Country_Profile_Revision_Sheet.pdf
Here's a quick a fun resource to help students learn the predicted economic growth of the world's major economies. Although a student wouldn't be expected to quote percentage growth statistics, it is always handy to have some figures ready to use as evidence or, at least, an understanding of the world's fastest growing states.
The game is called 'Higher or Lower' and is very simple. You are presented with the name of a country (e.g. China) and the predicted growth in GDP (compared to 2013) for 2014, as calculated by the IMF. You are also presented with the name of another country (e.g. United Kingdom). Your task is to say whether you think that the UK's predicted GDP growth is either higher or lower than that of China. Get the answer correct you earn a point and are presented with a third country and must predict whether their growth is higher or lower than that of the UK. However, get an answer wrong, you are out of the game! The maximum score of 37 (the number of countries in the database). Play the game a few times and really start to get a feel for the statistics for the different countries. The game is randomly set up so you can run it a few times a get a different sequence of countries each time.
Challenge your friends! Alternatively, you can go to the table on slide 3 of the resource and learn all of the figures off-by-heart!
Click on this link to upload the game. It is a Powerpoint-based game so you will need to have Powerpoint on your PC or Mac (versions beyond 2003). When prompted you should 'enable' macros. Sorry, this game does not work on mobile devices or OS like Android.
Membership of the European Union (EU) has had a big positive effect on average incomes in all but one of its member countries. That is the central finding of research by Nauro Campos, Fabrizio Coricelli and Luigi Moretti, to be presented at the Royal Economic Society’s 2014 annual conference. They also find that the more financially developed countries have grown significantly faster after joining the EU.read more...»
As Japan continues to push forward with Abenomics, monetary stimulus tapers off in the USA and and a halt elsewhere in the world alongside still timid business and consumer confidence, deflation becomes a serious risk for the advanced economies in the short term future.
The area with the biggest concerns without doubt is the Eurozone with deflation pushing up the real value of still cripplingly large debt levels, worryingly that analysts, forecasters and Eurozone representatives are finding difficult to objectively quantify. What the world really needs to see is business confidence and spending to pick up in advanced economies, fuelling positive inflationary pressure dampening the impact of exported deflation from Japan as a result of Abenomics. The Euro Area have yet another worry to add to their ever growing sickness list, worth watching very closely as to what happens in the coming months. This video explains further:read more...»
Gains from international trade, the history of European economic integration, fiscal and monetary policy, the launch of the €uro and the 2008 financial crisis are all clearly animated and explained in this superb video. In just over 12 minutes it explains the problems of the €urozone and the threats and challenges it still faces. Definitely one to watch for the closing stages of an A2 macro course.read more...»
The Confederation of British Industry has today launched a report called Our Global Future: The Business Vision for a Reformed EU - The report calls for further EU reform not least the completion of the single market in particular in services and the new internet economy. They argue for more free trade deals with other countries and regions.
The report produces estimates – based on past academic studies – that EU membership adds £62bn-£78bn a year to UK gross domestic product, equal to the combined economies of northeast England and Northern Ireland. That works out at £3,000 per household and £1,225 per individual. The fact sheets from the report can be found hereread more...»
Cambridge economist Mike Kitson argues here that the Euro Zone will eventually collapse after a number of difficult years. As pressure again mounts in the Eurozone leading Cambridge economist Michael Kitson says the euro might 'stagger on' for a few more years but eventually it will disintegrate. Policy makers have been papering over the cracks in the Eurozone and causing major problems for many member countries which are trapped by tight fiscal rulesread more...»
The recent debacle in Cyprus has essentially been shrugged off by the markets. The European Central Bank vigorously asserts the crisis in the Euro zone is over. So why is there continued unease about the financial viability of countries such as Spain and Portugal, a morass into which even the French are now being dragged?
Economic theory helps us understand a bit more about why this is the case. One thing which the last few years in Europe have shown very starkly is the massive difference between debt which is denominated in nominal terms and that which is in real terms. Nobel Laureate Chris Sims makes the point clearly in his recently published Presidential Address to the American Economic Association.read more...»
The scale and depth of the unemployment crisis in Europe is confirmed by fresh figures released by Euro Stat. Unemployment in the Euro Zone was 12.0% in February 2013 and the jobless rate for the European Union as a whole was 10.9%. Last month there were 26.3 million people counted as out of work in the twenty-seven countries within the single market, 19 million of whom live in Euro Zone countries. In the last year alone, unemployment in the Euro Zone has jumped by over 1.7 million but this aggregate figure hides large country differences and persistent regional and local variations. Here is the contextual data to take into the exam:
Evaluating the UK’s macro performance outside of the Euro Zone
- Decision made in 2003 that the UK would remain outside
of the single currency
- UK remains a full member of the single market
- Supportive of further EU enlargement but distanced from deeper fiscal / banking intregration
Crucial question both in the short and medium term is whether non-participation in the Euro makes a significant difference to key macro outcomes
- Real GDP growth, estimated Trend growth (LRAS)
- Core CPI inflation and inflation expectations
- Employment and unemployment rates
- Trade balances (with EU and beyond)
- Trends in relative productivity and per capita incomes
The OECD's world economic outlook is published twice and year and is a heavyweight publication with plenty of great relevant macro for ambitious A2 students. I have linked below to their latest report - including a streamed presentation on their key data forecasts and emphasis on some of the underlying challenges facing OECD countries.read more...»
The balance of economic power is expected to shift dramatically over the coming half century, with fast-growing emerging market economies accounting for an ever-increasing share of global output, according to new OECD research. Here are some links to their report and to media coverage.
I am launching into a short course in international trade, balance of payments and links to economic development issues. The standard fare is inescapable and there will be plenty of opportunity to cover theories of comparative and competitive advantage, evaluate the costs and benefits of protectionism and look at key trends in the balance of payments, terms of trade and capital accounts for developed and developing countries.
This time, in an attempt to freshen things up I am starting by looking at the work of Cesar Hidalgo and Richard Hausman at the MIT Media Lab and the Observatory of Economic Complexity. I first came across their work whilst reading Tim Harford's last book Adapt. They are mapping vast amounts of trade data from across the world to explore the extent to which export complexity, dynamic advantage and per capita incomes are connected. The data visualisations are tremendously interesting and I will be asking my Year 13 students to explore their site and choose some data of their own that sheds light on revealed comparative advantage in the world economy.read more...»
Following on from Ben Christopher’s article, a BBC Radio 4 interview with Andrew Balls, an investment fund manager, and younger brother of The Shadow Chancellor on the possibility of a Grexit - Greek exit from the Euro.read more...»
Here is a revision blog on some of the key economic challenges facing the seventeen member nations of the Euro Zone or Euro Arearead more...»
It’s time to start treating our A2 economics students like 9 year-olds…in a kind-hearted way. How? With this highly creative and engaging piece of analysis by the market analysts at JP Morgan.
The Eurozone crisis is both political AND economic, with the underlying issue one of who pays the bill for nation and bank bailouts. The political impasse in Europe over the crisis is difficult to understand. But this Lego-inspired graphic does a pretty good job of explaining who wants what. Follow the commentary underneath the graphic to hear the story.
Hand it out to your A2 students and see if they can make sense of it.
Many of Europe’s newer member states have outperformed established EU countries since they joined the single market in 2004 and 2007. And as a result there has been a process of convergence in average living standards and improved employment opportunities. Europe’s new nations have injected extra dynamism into the region despite inevitable teething problems along the way.
For students revising aspects of EU enlargement here is a streamed version of a presentation I gave to a Tutor2u event in London a few weeks ago
Related news issues
Germany expects influx of Polish workers (BBC news, April 2011)
Ireland is an economy suffering an economic, financial and political crisis. Her freedom to operate an independent macroeconomic policy is constrained by her membership of the single European currency and there are many who doubt that Ireland will be able to achieve a sustained recovery without some form of debt default. Our charts below track some of the key macroeconomic indicators for the Irish economy and below them we have gathered together recent blogs on Irish economic issues.read more...»
An excellent resource for Unit 2 and Unit 4 macroeconomics. Vishnu Padmanabhan from Timetric has this excellent look at the impact of the recession on real GDP growth in OECD countries. Which countries did best and worst in the recession? It turns out that Australia, Poland, Israel and South Korea were the countries least affected by the crisis and all avoided a full-blown recession - experiencing instead a soft landing. Here is Vishnu’s article. Our own growing selection of Timetric charts can be found by scrolling down to the bottom of this blog entry.
The OECD has just produced their annual review of Going for Growth - a largely supply-side look at policies designed to promote long-term growth in productive potential in the world economy. Details can be found here.
The term “relative deflation” is generally used to describe an economy with an inflation rate, which has not necessarily descended into negative territory, but is markedly lower than comparable economies. Over time, a low relative rate of inflation can lead to an improvement in price competitiveness in international markets, assuming that there has not been a compensating change in the exchange rate between two countries.
In our data example shown below we track consumer price inflation in Ireland, Spain and Germany. For most of the period shown, the annual rate of inflation in Germany was substantially lower than two of her partners in the European single currency area - this is an example of relative deflation.read more...»
In this Timetric chart blog we look at unemployment rates for a selection of country groups - these automatically updated charts will track what is happening to the standardised jobless rates for clusters of countries starting with one that includes the Euro Area, Germany, USA, UK and Japan. The second chart is the unemployment rates in the so-called PIIGS - Portugal, Italy, Ireland, Greece and Spainread more...»
We know that Ireland is in deep economic and financial trouble. Our Timetric chart will keep pace with what is happening to Irish real national output and their unemployment rate (measured as a % of their labour force). And in the links below you can connect to recent blog posts on Ireland - one of the countries inside the Euro Zone that faces a huge sovereign debt crisis that may take years to resolve.
Here is the chartread more...»
A starting point to this question is to discuss what “weaker EU countries” might mean. We can use some of the conventional indicators of macro performance to help us namely:
1. Slow or negative economic growth
2. Rising unemployment and falling employment rates
3. Deteriorating public sector finances and higher government debt
4. Relatively high inflation or perhaps an economy experiencing a period of deflation
5. A high deficit in trade in goods and services
Other indicators might be used to identify weaknesses in performance - for example:
1. Relatively low labour productivity
2. A falling share of global trade
3. Rising yields on long term government bond issues
4. Weaknesses in non-price competitiveness
Here is an updated twenty five slide streamed presentation on macroeconomic developments in the 27 countries of the EU with a particular focus on the Euro Area and UK/EU comparisons.read more...»
My Year 13 students have worked on a collaborative piece this week on the Irish financial and economic crisis. We considered the background to the crisis, why the UK is helping with the bail out and some of the consequences for the future stability of the Euro. The final version of the Google Doc is available to download here.read more...»
On a scale of 1 to Ireland, how broke are you? In February 2007 The Bank of Ireland had a market capitalisation of over sixty billion euro. Market cap is the market value of a company’s issued share capital, i.e. the number of shares multiplied by the current price of those shares on the stock market. Today that market cap has collapsed - and as of this morning - With a market cap of $1.4bln, the bookmaker Paddy Power is now Ireland’s largest financial stock!
Another perspective: Facebook’s latest stock market valuation is €105bn. Ireland’s annual GNP: €130bn.
And low-cost airline Ryanair’s market cap tonight is nearly three times that of the entire Irish banking system!
The destruction of shareholder value in the Irish banking system is immense - but the losses and debts of the banks have been socialised and are being borne by Irish taxpayers. The emergency budget will hit people tremendously hard - among the announcements:
* €200 per household property tax for Ireland
* VAT will rise twice to 23%
* A cut in the national minimum wage in Ireland - cut by one euro to 7.65 euros per hour
* Pay cuts in the private sector
* The introduction of domestic water charges by 2014.
Rumours that Steve Jobs is set to use some of Apple’s cash pile to purchase the country and re-brand it iLand appear to be a little wide of the mark!
This was a question posed this morning by one of my year 12 students and led to an interesting class discussion as to whether we should indeed be lending the Irish £7 billion. I’ve now found a BBC news video which will illuminate this topic further…read more...»
The latest growth figures for the ailing Irish economy make for sorry reading. National output continues to shrink and this is reducing the size of the tax base from which the government draws revenue to pay off the huge level of debt. This BBC news video provides a background on the debt-recession spiral.
We started our teaching this year by looking at issues related to measuring living standards and now we are moving onto aspects of the causes and consequences of economic growth.
I like to put growth into some kind of context by drawing on recent UK cyclical data and growth information for a range of other countries. I have attached a brief powerpoint of such charts with this blog which may be of some use for colleagues.
One of the interesting trends for many OECD countries is that estimated trend growth (the % change in potentail) GDP has fallen sharply in recent years. Indeed for Spain and Ireland, trend growth estimates have dropped into negative territory. Mo’s recent blog on hysteresis links in part to why this is happening.
Download the A2 Macro Growth Charts
Despite well publicised attempts to tackle an alarmingly high fiscal deficit, Ireland still has a budget shortfall in excess of ten per cent of national income and a high accumulated national debt measured as a percentage of GDP. But the true situation may be much worse. Low corporate taxes encouraged sizeable inflows of FDI especially from North America, the result being that Ireland’s GDP is much larger than her GNP - a better measure of the national income generated by Irish-owned economic assets. Government borrowing measured against GNP is very large indeed. And Ireland along with countries such as Greece, Portugal and Spain is mired in the classic debt-growth trap - how can it achieve fiscal austerity when national output and real incomes are falling.
Simon Johnson is strong on this issue today - the dangers of sovereign debt
“Debt overhangs hurt growth for many reasons: business is nervous that taxes will go up in the near future, the cost of credit is high throughout society, and social turmoil looms because continued austere policies are needed to reduce the debt.”
Deflation has been an issue for the Irish economy over the past 18 months. Given its strong position as one of the European PIIGS, rising unemployment and weak financial system, deflation is just another economic problem among many!read more...»
Stephanie Flanders offers this timely and well-judged piece from the Irish Republic about how the former celtic-tiger ecoonmy has adjusted to the painful medicine of fiscal austerity after their deep economic recession. She asks what lessons there might be for the political parties fighting the UK election.